EXHIBIT
      G

    


    SUBORDINATION
      AGREEMENT

    


    July
      8,
      2008


    


    EACH
      PURCHASER SET FORTH ON ANNEX B


    


    Ladies
      and Gentlemen:


     

    The
      undersigned lenders (each a “Creditor”,
      and
      collectively referred to as “Creditors”)
      are
      creditors of QPC Lasers, Inc. and/or each of the subsidiaries set forth on
      Annex
      A
      attached
      hereto (each, a “Borrower”
and
      collectively referred to herein as “Borrowers”)
      and
      desire that each lender set forth on Annex
      B
      attached
      hereto (each, a “Senior
      Lender”
and
      collectively, the “Senior
      Lenders”)
      extend
      such financial accommodations to the Borrowers as Borrowers may request and
      as
      the Senior Lenders may deem proper, including, without limitation, up to an
      aggregate of $3,888,500 in Principal Amount of secured convertible debentures
      pursuant to that certain Securities Purchase Agreement dated on or about July
      8,
      2008 among QPC Lasers, Inc. and the Creditors (the “Purchase
      Agreement”).
      Defined
      terms not otherwise defined herein shall have the meanings set forth in the
      Purchase Agreement.
      For the
      purpose of inducing Senior Lenders to grant, continue or renew such financial
      accommodations, and in consideration thereof, Creditors agree as
      follows:

    


    1.
       Any
      and
      all claims of Creditors against any Borrower, now or hereafter existing, are,
      and shall be at all times, subject and subordinate to any and all claims, now
      or
      hereafter existing which any Senior Lender may have against any Borrower
      (including any claim by the Senior Lenders for interest accruing after any
      assignment for the benefit of creditors by any Borrower or the institution
      by or
      against any Borrower of any proceedings under the Bankruptcy Code, or any claim
      by the Senior Lenders for any such interest which would have accrued in the
      absence of such assignment or the institution of such proceedings).

    


    2.
       Each
      Creditor agrees not to commence or threaten to commence any action or
      proceeding, sue upon, or to collect, or to receive payment of the principal
      or
      interest of any claim or claims now or hereafter existing which such Creditor
      may hold against any Borrower, and not to sell, assign, transfer, pledge,
      hypothecate, or encumber such claim or claims except subject expressly to this
      Agreement, and not to enforce or apply any security now or hereafter existing
      therefor, nor to file or join in any petition to commence any proceeding under
      the Bankruptcy Code, nor to take any lien or security on any of Borrower's
      property, real or personal, so long as any claim of Senior Lenders against
      any
      Borrower shall exist. In addition, each Creditor agrees not to convert any
      preferred stock or indebtedness of the Borrower held by it or otherwise receive
      shares of Common Stock or any other property in satisfaction or partial
      satisfaction of any claim against any Borrower so long as any claim of Senior
      Lenders against any Borrower shall exist.

     

    
      
        
        

      

      
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    3.
       In
      case
      of any assignment for the benefit of creditors by any Borrower or in case any
      proceedings under the Bankruptcy Code are instituted by or against any Borrower,
      or in case of the appointment of any receiver for any Borrower's business or
      assets, or in case of any dissolution or winding up of the affairs of any
      Borrower: (a) Each Borrower and any assignee, trustee in Bankruptcy, receiver,
      debtor in possession or other person or persons in charge are hereby directed
      to
      pay to Senior Lenders the full amount of Senior Lenders claims against any
      Borrower (including interest to the date of payment) before making any payment
      of principal or interest to Creditors, and insofar as may be necessary for
      that
      purpose, each Creditor hereby assigns and transfers to the Senior Lenders all
      security or the proceeds thereof, and all rights to any payments, dividends
      or
      other distributions, and (b) each Creditor hereby irrevocably constitutes and
      appoints each Senior Lender its true and lawful attorney to act in its name
      and
      stead: (i) to file the appropriate claim or claims on behalf of such Creditor
      if
      such Creditor does not do so prior to 30 days before the expiration of the
      time
      to file claims in such proceeding and if any Senior Lender elects at its sole
      discretion to file such claim or claims and (ii) to accept or reject any plan
      of
      reorganization or arrangement on behalf of Creditors, and to otherwise vote
      Creditors’ claim in respect of any indebtedness now or hereafter owing from any
      Borrower to Creditors in any manner the Senior Lenders deem appropriate for
      their respective own benefit and protection.

    


    4.
       Each
      Senior Lender is hereby authorized by Creditors to: (a) renew, compromise,
      extend, accelerate or otherwise change the time of payment, or any other terms,
      of any existing or future claim of such Senior Lender against any Borrower,
      (b)
      increase or decrease the rate of interest payable thereon or any part thereof,
      (c) exchange, enforce, waive or release any security therefor, (d) apply such
      security and direct the order or manner of sale thereof in such manner as such
      Senior Lender may at its discretion determine, (e) release any Borrower or
      any
      guarantor of any indebtedness of a Borrower from liability, and (f) make
      optional future advances to any Borrower, all without notice to Creditors and
      without affecting the subordination provided by this Agreement.

    


    5.
       On
      request of any Senior Lender, a Creditor shall deliver to the Collateral Agent
      (as defined in the Security Agreement) the original of any preferred stock,
      promissory note or other evidence of any existing or future indebtedness of
      any
      Borrower to such Creditor, and mark same with a conspicuous legend which reads
      substantially as follows:

    


    “THIS
      PROMISSORY NOTE IS SUBORDINATED TO ANY PRESENT OR FUTURE INDEBTEDNESS OWING
      FROM
      THE MAKER TO THE SENIOR LENDERS AND ITS ASSIGNS, AND MAY BE ENFORCED ONLY IN
      ACCORDANCE WITH THAT CERTAIN SUBORDINATION AGREEMENT DATED _______, 2008 WITH
      THE SENIOR LENDERS”

    


    6.
       In
      the
      event that any payment or any cash or noncash distribution is made to any
      Creditor in violation of the terms of this Agreement, such Creditor shall
      receive same in trust for the benefit of the Senior Lenders, and shall forthwith
      remit it to the Collateral Agent (as defined in the Purchase Agreement) in
      the
      form in which it was received, together with such endorsements or documents
      as
      may be necessary to effectively negotiate or transfer same to the Senior
      Lenders.

     

    
      
        
        

      

      
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    7.
       Until
      all
      such claims of Senior Lenders against the Borrowers, now or hereafter existing,
      shall be paid in full, no gift or loan shall be made by any Borrower to any
      Creditor.

    


    8.
       For
      violation of this Agreement, each Creditor shall be liable for all loss and
      damage sustained by reason of such breach, and upon any such violation each
      Senior Lender may, at its option, accelerate the maturity of any of its existing
      or future claims against any Borrower.

    


    9.
       This
      Agreement shall be binding upon the heirs, successors and assigns of Creditors,
      the Borrowers and the Senior Lenders. This Agreement and any existing or future
      claim of a Senior Lender against a Borrower may be assigned by such Senior
      Lender, in whole or in part, without notice to Creditors or such
      Borrower.

    


    10. Any
      and
      all notices or other communications or deliveries required or permitted to
      be
      provided hereunder shall be delivered as set forth in the Purchase
      Agreement.

    


    11. All
      questions concerning the construction, validity, enforcement and interpretation
      of this agreement shall be determined in accordance with the provisions of
      the
      Purchase Agreement.

    


    12. This
      agreement may be executed in counterparts, all of which when taken together
      shall be considered one and the same agreement and shall become effective when
      counterparts have been signed by each party and delivered to the other party,
      it
      being understood that both parties need not sign the same counterpart.


    


    13. This
      agreement constitutes the entire agreement among the parties with respect to
      the
      matters covered hereby and thereby and supersede all previous written, oral
      or
      implied understandings among them with respect to such matters.

    


    14. The
      invalidity of any portion hereof shall not affect the validity, force or effect
      of the remaining portions hereof. If it is ever held that any restriction
      hereunder is too broad to permit enforcement of such restriction to its fullest
      extent, such restriction shall be enforced to the maximum extent permitted
      by
      law.

    


    15. Each
      of
      the parties hereto acknowledges that this agreement has been prepared jointly
      by
      the parties hereto, and shall not be strictly construed against either
      party.

    


    [SIGNATURE
      PAGE FOLLOWS]

    


    
      
        
        

      

      
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    IN
      WITNESS WHEREOF, the parties hereto have caused this Subordination Agreement
      to
      be duly executed by their respective authorized signatories as of the date
      first
      indicated above.

    


    
      	
               

            	 
	
              Name
                of Creditor

            	 
	 	 	 
	
              By:
                

            	 	 


    

     

    
      	
              Name and Title:

            	 	 


    

     

    
      	
              Address for Notice:
                

            	 	 
	 	 


    

     

    
      
        
        

      

      
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    Acceptance
      of Subordination Agreement by Borrower

    


    The
      undersigned being the Borrower named in the foregoing Subordination Agreement,
      hereby accepts and consents thereto and agrees to be bound by all the provisions
      thereof and to recognize all priorities and other rights granted thereby to
      the
      Senior Lenders, their respective successors and assigns, and to perform in
      accordance therewith.


    


    Dated:
      July 8, 2008

    


    
      	
              QPC
                LASERS, INC.

            	 
	 	 	 
	
              By:
                

            	 	 
	 	 	 
	
              Name:
                

            	 	 
	
              Title:
                

            	 	 
	 	 	 
	
              QUINTESSENCE
                PHOTONICS CORPORATION

            	 
	 	 	 
	
              By:
                

            	 	 
	 	 	 
	
              Name:
                

            	 	 
	
              Title:
                

            	 	 


    

    


    
      
        
        

      

      
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